Feds Spent $29 Million on Prescription Drugs for 4,139 Illegal Aliens

(CNSNews.com) – The Centers for Medicare and Medicaid Services (CMS) spent almost $29 million to cover Medicare Part D prescription drugs for 4,139 individuals “unlawfully present” in the U.S. and thus ineligible to receive federal health care benefits, according to an audit by Daniel Levinson, inspector general of the Department of Health & Human Services. (See Medicare prescription drugs.pdf)

CMS “inappropriately accepted 279,056 PDE [prescription drug event] records with unallowable gross drug costs totaling $28,990,718” between 2009 and 2011, Levinson reported. Total federal expenditures under Medicare Part D during that same two-year time period came to $227 billion.

Medicare Parts A and B cover hospitalization, skilled nursing care, doctor visits, and other medical services and supplies. The IG previously reported in January that CMS had also paid $91.6 million to health care providers to cover 2,600 ineligible illegal aliens.

The unallowable payments were made by CMS despite the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which prohibits illegal aliens from receiving federal health care benefits, and CMS’ own 2003 memo warning: “Make no payments for Medicare services furnished to an alien beneficiary who is not lawfully present in the United States.”

Medicare Part D is a voluntary program that requires individuals who are entitled to benefits under Part A or enrolled in Part B to opt in by filling out a form to enroll in a federally approved prescription drug plan that has a contract with CMS. Enrollee premiums cover about a quarter of the overall cost, with Medicare picking up the rest.

Each time a Medicare Part D beneficiary fills a prescription, his or her plan sponsor is required to fill out a PDE and submit it to CMS. Medicare Part D providers receive “prospective payments…based on information in the sponsors’ approved annual bids” which are later reconciled with actual prescription costs.

CMS uses data from the Social Security Administration to determine Medicare eligibility, but “CMS did not have a policy addressing payments for unlawfully present beneficiaries under Medicare Part D that was equivalent to the existing policy that covers payments for these beneficiaries under Parts A and B,” the IG reported.

“Because CMS did not have such a policy, it did not have internal controls to identify and disenroll unlawfully present beneficiaries and to automatically reject PDE records associated with them,” auditors noted.

The IG recommended that CMS “develop and implement controls to ensure that Medicare does not pay for prescription drugs for unlawfully present beneficiaries” by preventing them from enrolling, disenrolling those already in the Medicare Part D system, and “automatically rejecting PDE records submitted by sponsors for prescription drugs provided to this population.”

The IG also recommended that CMS take steps to recover the $29 million. However, CMS said that “there was no effective way to fully recover the improper payments in question without first implementing the appropriate policies and procedures” that would have prevented the overpayment problem in the first place.